On July 15, 2005, Geron Corporation ("Geron") and Merck & Co., Inc., a
New Jersey corporation ("Merck"), entered into a Research, Development and
Commercialization License Agreement (the "Agreement") which provides Merck with
a worldwide exclusive license to develop and commercialize cancer vaccines
targeting telomerase, excluding vaccines utilizing dendritic cell technology.
Under the terms of the Agreement, Geron will receive an upfront payment
of $2.5 million, milestone payments upon achievement of certain development and
regulatory events, and royalties on future product sales.
Geron and Merck will conduct a joint research and development program
to optimize, and expedite the demonstration of efficacy and tolerability of, a
potential telomerase vaccine. The companies will form a Joint Research Committee
and a Joint Development Committee to coordinate the research program and
clinical development, respectively. Each company will bear all of its own costs
related to the research program; Merck will bear all costs of clinical
development.
Geron will continue to develop its dendritic cell-based telomerase
cancer vaccine which is currently in Phase I/II clinical trials at Duke
University Medical Center. Under the terms of the Agreement, Merck will pay
Geron an additional $1 million for an exclusive option, to be exercised within
two years, to negotiate a separate agreement covering Geron's dendritic
cell-based vaccine. The structure and terms of an agreement for the dendritic
cell vaccine will be negotiated should Merck exercise its rights under the
option.
Geron has also issued to Merck a warrant to purchase $18 million of
Geron common stock at an exercise price equal to the per share price of Geron's
next underwritten public offering, if any. The warrant must be exercised by
Merck in the event Geron completes an underwritten public offering of its common
stock before July 15, 2007, if such public offering meets certain criteria, but
it will otherwise expire on that date. |
